Patent Trolls Ramp Up Lobbying Efforts

from the good-luck-with-that dept

As it looks like the government might actually move towards real legislation to at least try to tackle the patent troll problem, the patent trolls are realizing that they need to ramp up their lobbying efforts with Congress. The article is kind of funny in a variety of ways, arguing that the patent maximalists haven't had the ear of Congress forever:

The attack on so-called trolls has obscured the complexity of patent-rights issues, said Adam Mossoff, a law professor at George Mason University School of Law. That’s in part because “patent companies weren’t active in lobbying or PR,” Mossoff said. “They let patent skeptics in the academy and in think tanks and firms that oppose them set the terms of the patent policy debate.”

No offense, but that sounds like someone who just joined the discussion here. From 2004 until 2011, there was a long, intense debate about patent reform, with early proposals having some aspects that might have curtailed at least some of the trolling problem. But they all got squeezed out because massive patent holders absolutely were extremely active in lobbying and PR. Yes, in many cases it came from the pharmaceutical side of the fence, as the pharma industry effectively killed patent bills every Congressional session, but the idea that patent maximalists haven't had their say is simply untrue.

The current debate about patent trolls “seems to create uncertainty around patents generally,” said Russ Merbeth, chief policy counsel at Intellectual Ventures. “From our perspective, that’s going to have a long-term negative impact on American competitiveness.”

That's an up-is-down, day-is-night kind of statement. The uncertainty around patents has always been whether or not (and when) actual innovators were going to get sued for doing something obvious by patent trolls and hoarders like Intellectual Ventures. That's the uncertainty. The fact that innovative companies had to hire more lawyers than engineers?That creates uncertainty and has a long-term negative impact on American competitiveness. It's the companies that are actually innovating that are getting sued. Meanwhile, companies like Intellectual Ventures, who have never brought a product to market ever, sit back and collect billions of dollars from the actual innovators? That's a recipe for disaster. You're taking money out of the hands of innovators -- those who expand and grow the economy, improve our competitiveness and generally improve our lives -- and giving it to a bunch of lawyers who aren't doing that at all?

Last month, IV’s Myhrvold, the former chief technology officer of Microsoft, made a visit to the Hill to argue that his firm, with its thousands of patents, plays an important role in the tech industry ecoysystem by providing a secondary market for patents. The system is generally working, he said, and the industry should hold off on new changes and let the America Invents Act — the patent reform legislation passed in 2011 — take full effect.

“Fundamentally, the term patent troll gets thrown at anybody that is a plaintiff in a patent case,” he said during an event in D.C. “If you are in favor of invention, I think you have to be in favor of invention rights.”

By the way, remember the Mossoff quote above about how the patent folks weren't active -- does he know why the America Invents Act finally passed in 2011? Because it finally got watered down enough that Intellectual Ventures stopped its shady practices to block the bill. Intellectual Ventures was heavily involved in the patent reform debate last time around, contrary to Mossoff's historical revisionism.

As for Myhrvold's claims here, note his careful word choice. He talks about "invention" -- not innovation. The two are different, but the fact is that Myhrvold isn't even talking about invention. He's talking about patenting, which is the process of getting a monopoly on whatever you can get a monopoly on -- whether or not you've actually invented anything at all. Furthermore, even if you believe in invention, that has nothing to do with supporting patent reform that stops patent trolls like Intellectual Ventures. Patent trolls harm inventors, because they give a patent to whoever got their application through the patent office -- and that harms every other inventor who might be building something much better, and much more valuable to society, by putting a giant tollbooth in its way.

It's much, much better (and empirically more effective for the economy) to reward invention by letting inventors compete in the market. Let the market decide who builds the better product, and go from there.

Re: Lobbying

Troll have more to lose with changes to the patent rules, since they exist because of loopholes and sloppy legal rulings. Trolls have great incentive to maintain the status-quo. Any change to the current rule-set runs the risk of damaging the trolling industry. For Innovation in the US a rule change mean that Innovation continues. but innovators are limited in funds, each successful trolling moves money from innovators to trolls, unsuccessful trolling moves money from innovators to lawyers.

Lobbying means getting the governments ear and change laws in your favour. A private company achieves its lobbying goal by spending money, trolls have heaps to spend on getting laws they can use. Innovators spend money on bring a product to market and make a profit, the don't want to spend money on lawyers and incur a cost.

Abolish The Patent System

The patent system has been an over-200-year failed experiment. Its costs exceed its benefits. How many books on that subject do academics have to write? Experiments do fail. When something fails, then stop doing it.

Alchemy failed, so nobody does alchemy any more. Marxism failed, so nobody seriously suggests it as a sensible economic doctrine any more. There have been any number of failed ideas throughout history. If you want to make progress, stop doggedly hanging on to failures. Toss them. Stop it.

The patent system needs to be replaced with a system for the free and open dissemination of technical information. Parts of the internet are making good progress on that project.

The only real defenders of the patent system are all abusive lawyers who are making money out of it. Restricting the use of inventions is a dumb idea. It is time for the patent system to be abolished.

There's no reason medicines should cost as much as they do in America. It's bankrupting our economy and killing people who can't afford treatment.

Obama Care isn't going to solve this, because it doesn't fix the outrageous medical prices. The only thing Obama Care does it force people into the expensive medical system. Whether they want to be in that system or not.

If you don't go into the expensive medical system like you're told too, you get fined!

Great, now I'm sick and can't afford to buy medicine because the US Gov fined me, and gave me absolutely nothing in return!

Obama Care is a train wreck. Not to mention it's unconstitutional. It's not going to fix anything. Only accelerate the damage our overpriced medical system is causing everyone.

$400 a month for insurance premium + $6,000 out of pocket fee, and the insurance only covers 60% of medical expenses.

Or you can opt out and pay the US Gov a $1,000+ a year fine and receive absolutely nothing in return.

patents okay, need to tax them though

The problem with patents is that they are too cheap to obtain. What is needed is a system where you pay a certain percentage of the amount of protection you want. Let's say you pay 2% a year, so the cost is $20,000 for $1,000,000 of protection, for a patent that lasts 20 years. Anyone else can license the patent permanently by paying a lump sum of of 5% x insurance amount x number of years left on the patent.

Example: you're a small company and patent your idea and pay $20K/year for $1 million protection. A big company pays a lump sum of $50K x number of years left and thus obtains permanent rights to the patent and hence can compete with you. You can either go out of business, and thus stop paying your $20K/year and pocket the lump sum. Or you can stay in business and use the lump sum to offset your $20K/year fees and also allow you to price your product somewhat lower.

It's easy to pick holes in the above scheme. Someone with a micro-economics background could do a much better job. But the basic idea is that small companies need protection from competition, otherwise they will be reluctant to make big investment. But they should have to pay the government (and thus the consumers of the united states) for this protection, since this protection reduces competition and thus hurts consumers. The amount they pay should depend on how much protection they want. There should be a way for other companies to automatically license patents, at a reasonable cost. The licensing scheme should not be one that allows big companies to license for just a year, drive the small company out of business, then stop licensing, hence the lump sum scheme. The licensing fee should be depend both on the amount of insurance the inventor purchased and the number of years left in the patent.

Patent trolls would be crushed by the system I just described. Inventors would no longer profit from inventions, but only from businesses built around those inventions. However, inventors would be able to protect their fledging companies better than in a system with no patents. The huge amount of fees produced by this system could be used to pay for much better staffing at the patent agency, both to reduce junk patents and to assist small inventors file their patents properly and to automatically translate and file US patents in foreign countries at no cost to inventors who are American citizens.

Re:

the health insurance industry is wedded to it's monster profits, these profits are not recycled into health care provision. This system is an atempt to turn wall-street banker run health insurance into a proper bill paying mechanism for every one.

Insurance only works if everyone pays premiums and capital funds arnt strip mined by brokers and bankers and finacial managers.

It easy to believe the anti-propaganda.

But at the end of the day, the old health system is stuffed there ate too many pig snouts in the trough. this alternate system will be a chance to shake out the money sucking leaches

Re: The anti-patent anarchists

This article makes no sense and neither does the comments

The author has zero knowledge of what he is writing about. The comments are even worse.
Why don’t we discuss exactly how many cases there are per year on software patents and why there has been a bump in patent cases for software? There are about 40 patent cases per year on software related patents out of the 35 million patents in the US. WHAT? ONLY 40 YOU SAY? YES. Then why are we writing about it? Because people fall for terrible articles like this and think there is a problem when there is nothing behind the curtain.

Not only that, but big companies have forced each case to be separate so a patent holder cannot sue multiple companies within a single suit. This has caused the total number of all suits in software to mushroom from 40 per year to 65 per year. What a joke. There is no problem here. Yet Techdirt and others continue to beat the drum. Go sit in your room and keep beating your drum and bring down what has made America great.

Stop Silly Comments

The press only focuses on Trolls and all of you fall for their terrible job at presenting facts. Stop commenting on things you know nothing about. All you do is spread disinformation and make the net the worst invention ever created. Maybe we should all start reading newspapers again.

Here is how wrong this article is: So...if you are a small inventor and want to license your patents to a large company you are forced to become “a troll”. So if you approach them for a license, they have the right to sue you and attack your patents based on the recent changes to the law that congress pushed through thanks to IBM and Google. In fact, the better the patents are the more likely they will sue you for venue. Or, you have to sue them to get their attention or lose the value of your patents and venue…
So if you approach a big company after your spent years inventing and creating a valuable patent and spent about $40,000; the big company decides to sue you in Alaska. You now have to put up a defense in Alaska or lose your patents. They are ready to spend $3M. Where do you get $3M to fight back? So you have to quit the suit and license them for free. Patents are already becoming worthless to anyone but very large companies. We are destroying our small inventor and will never get him/her back.